Los Angeles Times

September 6, 2001

Pop Artists Rap Record Deals, Lobby Lawmakers for Relief
 Music: But industry executives say they're the ones taking the risks when signing unproven talent.


SACRAMENTO -- Courtney Love, Don Henley and other musicians descended on the Capitol on Wednesday and said a state law governing their contracts with record companies locks them into "indentured servitude."

Addressing a panel of legislators, the artists said they are unfairly exempted from a section of the labor code that protects entertainers from being tied to one company for more than seven years.

"Recording artists should not be singled out" and deprived protection under the code, said country singer LeAnn Rimes, 19, adding that she probably will be locked in her contract--signed when she was 12--until she is 35. "It's grossly unfair," added Henley, co-founder of the Recording Artists Coalition, which represents more than 125 performers.

Record company executives disputed that assertion, saying the current contracting arrangement justly protects labels that take a significant risk in signing unproven talent.

"Artists want to sign with a label, take an advance payment, and then just walk away when it pleases them," Cary Sherman, senior executive vice president of the Recording Industry Assn. of America, said in an interview. "You can't do business like that."

The remarks were made on the opening day of special legislative hearings on the music business. The inquiry by the Senate Select Committee on the Entertainment Industry comes as more artists are organizing to challenge traditional practices of the music establishment.

Wednesday's hearing--and a preceding news conference--attracted photographers and stargazers, who crowded the Capitol's corridors to get a glimpse or snapshot of Love, Henley, the Dixie Chicks and jazz singer Patti Austin.

Though much of the testimony dwelt on the arcane nuances of contracts, the hearing had its light moments. Lovepunctuated her passionate, rambling presentation with hand gestures, props and the occasional amusing comment.

Sensing that legislators might not be receptive to rock stars' claims of financial suffering, Love acknowledged that she doesn't live in poverty: "Nobody is saying, 'I'm so poor, please help me.' . . . I have a swimming pool. I have nice shoes."

Most of the day's business, however, was serious, and chairman Kevin Murray, a Democrat from Culver City, opened the hearing by noting that the music industry is vital to the state's economic health.

"We want California to be both artist friendly and record company friendly," said Murray, a former talent agent. "We certainly consider the industry one of the most important pieces of the puzzle."

At issue Wednesday was the recording industry's tradition of long-term contracts that keep artists tied up for years beyond what is legal in other industries, including television, film and sports.

Such terms are permitted because musicians are excluded from a Labor Code section that limits employment contracts to seven years. The exclusion was granted by the Legislature in 1987 at the urging of the record industry.

Artists say the 1987 amendment locked them into a relationship that, in Henley's words, is tantamount to "indentured servitude."

Contracts typically require artists to deliver at least seven albums, but record companies normally require a one-to-two-year gap between releases, to allow for promotion through videos and touring.

As a result, fulfilling the obligations of a seven-album deal can take 14 years--the span of most music careers.

"This is a one-way system," Henley said. "If a company wants to release an artist after seven years, it can. But we're stuck."

Don Engel, an attorney representing musicians, testified that many young artists are so desperate to get signed by a label that they pay little heed to the contract terms--and wind up getting exploited.

"The kids who come to Hollywood to get into the business would pay the record companies 5 cents per record to sell their albums," Engel said. "They would do anything."

Sherman and several record company officials defended the status quo, saying artists are paid fair royalties and handsome advances by labels that take tremendous gambles in investing in new performers--90% of whom, by their estimation, never make it big.

Unsuccessful artists are not required to reimburse record companies for their losses, and those who make it typically renegotiate their contracts, earning bigger advances and higher royalties, they argued.

"It's risk versus profit," said Miles Copeland, chief executive of ARK21 Records. "If you take away the profit [by allowing artists to leave a label after seven years], you take away willingness to risk."

As the hearing wound down, it was unclear whether Murray would push legislation responding to the artists' concerns. In the past, however, he has expressed sympathy for the artists, suggesting that the seven-year exemption seems unfair.

Music companies also are under scrutiny on Capitol Hill, where the House Entertainment Industry task force plans to hold hearings on contractual rights